A Broke America

In the month of December in 2007 there was less spending by consumers in goods than the previous year. Thus supporting the idea that the US is not spending enough to stimulate the economy and in the end causes inflation. One of the main reasons why consumers are not spending as needed is because of the increase in oil prices and food prices. If this activity continues than the US may be heading into a period of stagflation- a combination of a stagnant economic growth and increasing prices. Causing retailers to raise their prices by a 3.5 percent increase, and leading people to buy less goods with their money. If this process is to be helped then the central bank will have to lower the interest on money, so that it can stimulate growth, that is being printed. But in doing so this may lead to more inflation because retailer will be forced to increase their prices once more, thus causing more room for inflation. Also according to the Deparment of Labor, unemployment claims have risen from 69,000 to 375,000 who usually pans out how the labor in the country is doing. Furthermore the downfall's that the economy is facing, wether it be the housing market, retailers or gas prices, we will all be effected by the fall of the economy. In the end, these factors that affect the economy may lead to high enemployment rates, inflation and a broke America.